Non-Resident Landlord Scheme Self Assessment: London Guide

Non-Resident Landlord Scheme Self Assessment: London Guide

Navigating the complexities of the UK tax system can be a daunting task, especially for non-resident landlords. The Non-Resident Landlord Scheme (NRLS) adds another layer of complexity, but understanding it is crucial to ensure compliance and avoid penalties. This guide, brought to you by GM Professional Accountants, aims to demystify the NRLS and provide you with the essential information you need for a smooth Self Assessment process.

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What is the Non-Resident Landlord Scheme?

The NRLS is a system set up by HM Revenue and Customs (HMRC) to ensure that landlords who do not live in the UK pay the correct amount of tax on their rental income from UK properties. If you are a non-resident landlord, meaning you live outside the UK for more than six months in a tax year, you must register with the scheme.

Why is the NRLS Important?

Non-compliance with the NRLS can result in significant penalties and interest on unpaid taxes. Ensuring that you are correctly registered and that your rental income is properly reported can save you from future headaches and financial losses.

Key Dates for 2024

For the 2024 tax year, the Self Assessment deadline is 31 January 2025. However, it’s advisable to start gathering your documents and financial information well in advance to avoid last-minute stress.

Steps to Register for the NRLS

  1. Register with HMRC: Non-resident landlords must inform HMRC about their status and register for the scheme. You can do this online through the HMRC website.
  2. Receive Approval: Once registered, HMRC will provide you with an approval letter. This letter should be kept safe as it confirms your status under the NRLS.
  3. Inform Your Tenants or Letting Agent: If you receive rental income through a letting agent, they will handle the tax deductions on your behalf. If not, you must inform your tenants about your non-resident status, and they will be responsible for deducting basic rate tax from the rent before paying you.

Self Assessment Process

Collect Your Documents

Gather all relevant documents, including:

  • Rental income statements
  • Mortgage interest statements
  • Property maintenance receipts
  • Any other expenses related to your rental property

Calculate Your Taxable Income

Your taxable income is your total rental income minus allowable expenses. Allowable expenses can include mortgage interest, repairs, and maintenance costs. For a detailed list of allowable expenses, you can visit the UK Government’s guidance.

Submit Your Self Assessment

Submit your Self Assessment tax return online by the deadline. If you are new to Self Assessment, you will need to register for an online account with HMRC, which can take a few weeks, so it’s best to start early.

Case Study: John, a Non-Resident Landlord in London

John moved to Australia in 2022 but continued to rent out his property in London. Unsure about his tax obligations, he contacted GM Professional Accountants. We helped John register for the NRLS and guided him through the Self Assessment process. By ensuring all his expenses were accurately recorded, John minimised his tax liability and avoided any penalties.

Common FAQs

Q: What happens if I don’t register for the NRLS?
A: Failure to register can result in penalties and interest on unpaid taxes. It’s essential to register and comply with the scheme to avoid these issues.

Q: Can I offset my overseas mortgage against my UK rental income?
A: Only the interest on a mortgage can be offset against rental income, not the capital repayments. It is important to keep accurate records of your mortgage interest payments.

Q: Do I need to file a Self Assessment if my letting agent handles everything?
A: Yes, even if your letting agent handles the tax deductions, you still need to file a Self Assessment to declare your rental income and claim any allowable expenses.

Final Thoughts

The Non-Resident Landlord Scheme and Self Assessment process can be challenging, but with the right guidance and preparation, you can navigate it successfully. At GM Professional Accountants, we specialise in assisting non-resident landlords with their tax obligations. Contact us today to ensure your tax affairs are in order for 2024.

By understanding and complying with the NRLS, you can manage your UK rental income efficiently and avoid unnecessary penalties. Let GM Professional Accountants help you every step of the way.

For more detailed guidance, visit our blog or contact our experts for personalised advice.

Sole Trader vs. Limited Company: Pros and Cons Updated for 2024

Sole Trader vs. Limited Company: Pros and Cons Updated for 2024

Becoming self-employed is a significant career decision. As your own boss, you exchange the need to conform to an employer’s standards for the responsibility of handling all the legal and financial aspects of your business. Many business enthusiasts consider teaming up with a few individuals or a larger group to ease the burden of running the business. As a sole trader, you are the business itself. In a limited company, the business is an independent entity where you are a director and a shareholder holding a portion of the company’s capital. Success in business is subjective, and it’s crucial to decide on the best business structure early and carefully plan your business’s course. Below, we outline the updated pros and cons for 2024.

Sole Trader

1. Legal Disputes

  • Personally liable for any legal disputes unless covered by applicable insurance such as employer’s liability.
  • Risk of personal assets being used to settle business debts.

2. Tax

  • Subject to income tax and National Insurance Contributions (NICs) on profits.
  • Can offset trading losses against other income.

3. Losses

  • Can offset trading losses against other personal income, subject to restrictions.

4. Profiting

  • Withdrawals are not taxed separately from business profits.

5. Borrowing

  • Personal liability for business debts.
  • Bank loans and other funding subject to personal credit rating.

6. Accounts

  • No formal requirement to maintain accounts, though advisable.
  • Must file annual tax returns with HMRC.

7. Selling the Business

  • Gains from selling the business are subject to Capital Gains Tax (CGT).

8. Death

  • Business ceases upon the owner’s death unless ownership is transferred.

9. Personal Earnings

  • Can withdraw any amount from business funds, subject to tax rules for payments to family members.

10. Expenses

  • Can claim tax relief on expenses incurred exclusively for business operations.

Limited Company

1. Legal Disputes

  • The business is a separate legal entity, making it difficult to sue directors personally.
  • Directors and officers are generally protected unless fraud or legal violations are proven.

2. Tax

  • Corporate tax rates are typically lower than income tax rates.
  • Shareholders and employees are subject to PAYE (Pay-As-You-Earn) and NICs.
  • Dividends are taxed, with a tax-free allowance of £2,000 for 2024.

3. Losses

  • Can carry losses forward or back to offset against future or past profits but cannot offset against personal income.

4. Profiting

  • Profits distributed as dividends are subject to dividend tax.
  • Employment benefits for shareholders are taxable.

5. Borrowing

  • Company can borrow funds, but directors may need to provide personal guarantees.
  • Loans to directors must comply with the Companies Act 2006, and unpaid loans may incur a tax charge.

6. Accounts

  • Required to file annual accounts and corporation tax returns.
  • Must comply with UK accounting standards and Companies House regulations.

7. Selling the Business

  • Selling company shares may be more tax-efficient.
  • Shareholders face both corporation tax and dividend tax on sale proceeds.

8. Death

  • Continues to operate as an independent legal entity even after a director’s death.

9. Personal Earnings

  • Directors and shareholders are subject to PAYE and NICs on personal earnings.
  • Payments to family members must comply with tax regulations.

10. Expenses

  • Business expenses can be claimed for tax relief.
  • Private expenses incurred by directors may be treated as distributions or earnings.

With these updated pros and cons, business enthusiasts can better decide whether to operate as a sole trader or establish a limited company. This guide also serves ongoing businesses considering restructuring to maximize profits, minimize tax liabilities, and avoid bankruptcy.


GM Professional Accountants are accountants in London specializing in small businesses and self-employed tax returns.

Attention Amazon Sellers: Important Changes to Amazon FBA VAT Regulations Starting 1st August 2024

Crucial VAT Changes for Amazon FBA Sellers in the UK Effective 1st August 2024

Big Changes Ahead for Amazon FBA Sellers in the UK

Attention Amazon sellers! Significant changes are coming to Amazon FBA in the UK starting 1st August 2024. These new VAT regulations could substantially impact your profits.

Amazon has announced that from 1st August 2024, they will alter how VAT is invoiced for Amazon FBA sellers. Historically, Amazon fees, excluding Sponsored Ads, were invoiced under the reverse charge VAT scheme by Amazon Luxembourg. This allowed new sellers to bypass VAT on Amazon fees by declaring VAT exemption and even applying for refunds if they were mistakenly charged.

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What’s Changing?

But this process is about to change. Amazon will now invoice sellers through branches within each country, eliminating the reverse charge scheme. For Amazon UK sellers, this means that all Amazon fees will now include a 20% VAT, which could reduce your profits by about £1 to £2 per unit.

For VAT-registered sellers, this might not be a huge change since you can reclaim the VAT. However, new sellers should resist the urge to register for VAT early just to reclaim these fees. It’s still more tax-efficient for Amazon FBA beginners to wait until they reach the current £90,000 threshold before registering for VAT. While you’ll now have to pay VAT on Amazon fulfilment and referral fees, you’ll avoid having to include 20% VAT in your sale price, which would cut into your profit margins even more.

Amazon’s Announcement

Amazon’s announcement reads:

“Effective 1st August 2024, Selling on Amazon, Fulfilment by Amazon, and all other services currently supplied by Amazon Services Europe S.à r.l. (ASE) will be supplied by Amazon EU S.à r.l. (AEU). All agreements, policies, terms, and conditions currently referring to ASE, including Amazon Payments agreements, will be updated to AEU. Additionally, all invoices issued by Amazon will be issued by AEU instead of ASE after 1st August 2024.”

If your business is based in the UK, Germany, France, Italy, Spain, Netherlands, Poland, Belgium, or Sweden, you’ll be invoiced by the AEU branch in your country. This means local VAT rules may apply, and VAT will be deducted from Amazon fees. However, you can typically recover this VAT through your normal VAT return process.

If your company is not based in these countries, you will still be invoiced by the AEU head office in Luxembourg, with no changes to VAT application.

What Should You Do Next?

We strongly recommend consulting with your tax advisor to understand the impact of these changes on your business and to get advice on recovering VAT according to your local regulations.

Stay updated, plan accordingly, and ensure your business is prepared for these changes. Your bottom line depends on it.


By staying informed and seeking professional advice, you can navigate these changes effectively and maintain your profitability. Make sure to review your current VAT practices and adjust your business strategy to accommodate these new regulations. Your proactive steps today will secure your success in the evolving Amazon marketplace.

Rent to Rent Property Accountants Guide 2024: Navigating VAT Exceptions and Financial Strategies

Rent to Rent Property Accountants Guide 2024: Navigating VAT Exceptions and Financial Strategies

The property market is constantly evolving, and understanding the intricacies of VAT on rental properties can be a daunting task for landlords and property investors. This guide, crafted by GM Professional Accountants, aims to shed light on the VAT liabilities surrounding rent-to-rent properties and offer actionable insights for 2024.

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Understanding VAT on Property Leasing

In the UK, the general rule is that the grant, assignment, or surrender of an interest in land is exempt from VAT. However, there are several notable exceptions that landlords and property investors must be aware of:

  1. Freehold Sale or Long Lease in New Dwellings: Generally zero-rated if sold by the person constructing the property. This also applies to communal residential or relevant charitable buildings. For more details, refer to the Buildings and Construction (VAT Notice 708).
  2. Freehold Sale of New or Partly Completed Buildings: The sale of new or partly completed shops, for instance, has different VAT implications. Specifics can be found in paragraph 3.2 of the VAT manual.
  3. Transfer of a Going Concern: When land and buildings are sold as part of a business transfer, it is not considered a supply for VAT purposes. Detailed information can be found in the Transfer a Business as a Going Concern (VAT Notice 700/9).
  4. Hotel and Holiday Accommodation: Generally standard-rated, though there have been temporary reductions. Refer to the Hotels and Holiday Accommodation (VAT Notice 709/3) for the latest rates and guidelines.
  5. Moorings for Houseboats: Typically standard-rated unless the mooring is for a qualifying ship, which may be zero-rated. For specifics, see the Ships, Aircraft, and Associated Services (VAT Notice 744C).

Key Dates for Filing in 2024

Keeping track of important dates is crucial for property investors and landlords. Important Deadlines to keep in mind for 2024:

  • 31 January 2025: Deadline for online self-assessment tax returns for the 2023/24 tax year.
  • 6 April 2024: Start of the 2024/25 tax year.
  • 5 October 2024: Deadline to register for self-assessment if you’re self-employed or have other income that needs to be reported.

Case Study: Successful VAT Management in Rent-to-Rent

Let’s consider a case study involving a landlord, Jane, who manages multiple properties under a rent-to-rent scheme. Jane consulted with GM Professional Accountants to understand her VAT obligations and optimise her financial strategy. By leveraging expert advice, she was able to:

  • Correctly apply VAT exemptions and standard rates where applicable.
  • File accurate and timely VAT returns, avoiding penalties.
  • Opt to tax certain properties, which allowed her to reclaim VAT on related expenses.

Jane’s proactive approach, guided by professional accountants, not only ensured compliance but also enhanced her profitability.

Why Choose GM Professional Accountants?

Navigating the complexities of VAT in the rent-to-rent property market requires expert guidance. GM Professional Accountants offer tailored advice and comprehensive services, including tax returns, payroll, and company accounts. Our team stays updated with the latest HMRC regulations, ensuring you receive accurate and effective advice.

For further reading on VAT implications and exemptions, check out the HMRC VAT Manuals.


By understanding the specific VAT liabilities and leveraging professional advice, landlords and property investors can navigate the rent-to-rent market more effectively in 2024. Stay informed, plan ahead, and consult with experts like GM Professional Accountants to optimise your financial outcomes.

Do you need to register for Self Assessment as Director Calculator?

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Do I need to register for self-assessment if I am a director?

Company directors must register for Self Assessment with HMRC before submitting their personal tax returns.

Am I self-employed if I am a director of a ltd company?

Company directors are not classified as self-employed.

Non-Resident Landlord Scheme: Your 2024 Tax Return Guide

Non-Resident Landlord Scheme: Your 2024 Tax Return Guide

Navigating the Non-Resident Landlord (NRL) Scheme can be complex, especially with the 2024 tax deadlines approaching. This comprehensive guide by GM Professional Accountants aims to clarify the intricacies of the NRL Scheme, ensuring you stay compliant while optimising your tax position.

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What is the Non-Resident Landlord Scheme?

The NRL Scheme applies to landlords who live abroad for more than six months and rent out property in the UK. Under this scheme, tenants or letting agents deduct basic rate tax (currently 20%) from the rental income before passing the remainder to the landlord. This deduction serves as an advance payment towards the landlord’s UK tax liability.

Non-Resident Landlord Scheme: Your 2024 Tax Return Guide

Why is the NRL Scheme Important?

Compliance with the NRL Scheme is crucial to avoid penalties. As a non-resident landlord, understanding your tax obligations can save you time, stress, and money. The scheme also ensures that the UK tax authorities receive tax payments on rental income from overseas landlords, which is vital for maintaining the integrity of the UK tax system.

Key Dates for Your 2024 Tax Return

The tax year runs from 6 April 2023 to 5 April 2024. Key filing dates include:

  • 31 January 2024: Deadline for online self-assessment tax return submission and payment of any tax due for the 2022/2023 tax year.
  • 31 July 2024: Deadline for the second payment on account for the 2023/2024 tax year.

It’s essential to adhere to these dates to avoid penalties and interest charges.

Case Study: Effective Management of the NRL Scheme

Consider John, a UK citizen working in Dubai. He owns a property in Manchester, generating £15,000 annually in rental income. John registered with HMRC’s NRL Scheme, allowing his letting agent to pay him the rental income without tax deductions. At the end of the tax year, John submits a self-assessment tax return, declaring his UK rental income. With the assistance of GM Professional Accountants, John effectively claims allowable expenses and benefits from double taxation relief, reducing his overall tax liability.

How GM Professional Accountants Can Help

At GM Professional Accountants, we specialise in guiding non-resident landlords through the complexities of the UK tax system. Our services include:

  • Registration Assistance: Helping you register with the NRL Scheme and HMRC.
  • Tax Return Preparation: Ensuring your tax returns are accurate and submitted on time.
  • Expense Management: Identifying and claiming allowable expenses to reduce your taxable income.
  • Tax Planning: Providing strategic advice to optimise your tax position, including leveraging double taxation treaties.

Common Questions About the NRL Scheme

  1. Do I need to register for the NRL Scheme?
    Yes, if you are a non-resident landlord, you must register with HMRC.
  2. Can I receive my rental income without tax deductions?
    Yes, if you register with the NRL Scheme and receive approval, your letting agent or tenant can pay you without deducting tax.
  3. What expenses should I be claiming against my rental income?
    You can claim a range of expenses, including property management fees, maintenance costs, and mortgage interest.
  4. What happens if I don’t comply with the NRL Scheme?
    Non-compliance can result in penalties and interest charges. It’s essential to register and adhere to the scheme’s requirements.

For more detailed guidance, visit HMRC’s official page on the NRL Scheme.

Conclusion

Managing your obligations under the Non-Resident Landlord Scheme doesn’t have to be daunting. With the right support from GM Professional Accountants, you can ensure compliance and optimise your tax position. Contact us today for personalised advice and support with your 2024 tax return.

By following this guide and leveraging professional assistance, non-resident landlords can navigate the UK tax system confidently and efficiently.

For further insights and updates, check out our blog or contact GM Professional Accountants directly. Your peace of mind in tax matters is our priority.

I didn’t realise I went over the vat threshold – What happens?

Understanding VAT Thresholds: What Happens If You Go Over £90,000?

Navigating VAT thresholds can be a daunting task for many business owners. With the current VAT threshold set at £90,000, it’s essential to be aware of your obligations and understand the steps you need to take if you exceed this limit. At GM Professional Accountants, we frequently encounter questions from clients who find themselves unexpectedly over the VAT threshold. Here’s a comprehensive guide to help you manage this situation effectively.

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What is the VAT Threshold?

The VAT threshold is the annual turnover limit set by HM Revenue and Customs (HMRC) which determines whether a business needs to register for VAT. As of 2024, this threshold stands at £90,000. This means if your business’s taxable turnover exceeds £90,000 in a 12-month period, you must register for VAT.

Why is it Important to Monitor Your Turnover?

Monitoring your turnover is crucial to ensure you remain compliant with HMRC regulations. Exceeding the VAT threshold without registering can result in penalties and interest on unpaid VAT. It’s vital to keep accurate records of your sales and be proactive in managing your accounts.

What Should You Do If You Go Over the VAT Threshold?

If you realize you’ve gone over the VAT threshold, you need to act quickly. Here are the steps you should follow:

  1. Register for VAT: You must register for VAT with HMRC within 30 days of exceeding the threshold. Failing to register on time can lead to penalties.
  2. Calculate and Pay VAT: From the date you are required to register, you must charge VAT on your sales and pay this to HMRC. You can reclaim VAT on your business purchases as well.
  3. Update Your Invoicing System: Ensure your invoices include VAT information and your VAT registration number.
  4. File VAT Returns: VAT returns must be submitted quarterly. The deadlines are typically one month and seven days after the end of each VAT period. For instance, if your VAT period ends on 31st March 2024, your return would be due by 7th May 2024.

Case Study: Managing VAT Registration

Let’s consider a case study to illustrate the importance of monitoring your VAT threshold. Jane runs a small boutique in London. In May 2023, her annual turnover was £85,000. Business picked up significantly in the summer, and by August 2023, her turnover had exceeded £90,000. Jane was unaware of the VAT threshold and didn’t register for VAT until October 2023. As a result, she faced penalties and had to pay backdated VAT. If Jane had monitored her turnover closely and registered on time, she could have avoided these issues.

How Can GM Professional Accountants Help?

At GM Professional Accountants, we specialise in helping businesses navigate complex tax regulations. Our expert accountants can assist you with:

  • Accurate Record Keeping: We help you maintain accurate financial records to monitor your turnover and ensure compliance with VAT regulations.
  • Timely VAT Registration: We guide you through the VAT registration process, ensuring you meet all HMRC deadlines.
  • VAT Return Filing: Our team manages your VAT returns, ensuring they are accurate and submitted on time, helping you avoid penalties.

Learn More About VAT

For more detailed information on VAT registration and compliance, visit the HMRC VAT Guide.

In conclusion, keeping a close eye on your turnover and understanding your VAT obligations is essential for any business. If you find yourself going over the VAT threshold, act quickly and seek professional advice to avoid unnecessary penalties. At GM Professional Accountants, we are here to support you every step of the way. Contact us today for expert advice and assistance with your VAT and accounting needs.